Government Increases Import Tax on Smartphones, Will Hurt Apple

Indian Government is focusing to restrict supplies from abroad and build up the domestic market. The import tax has been increased on various electronic items such as mobile phones, digital cameras, microwave ovens, and televisions. Pankaj Mohindroo, president of the Indian Cellular Association, said the move will help the domestic manufacturers who are making around 500 million mobile phones annually.

On smartphones, the import duty has been increased to 15% from 10%, which will affect mobile manufacturers especially Apple as the cost of phones will now surge and India is a $10 billion smartphone market. Even after 10 percent of basic customs duty (BCD) on cell phones, Goods and Services Tax (GST) roll out in July saw price cuts for Apple devices.

About eight out of 10 smartphones that are sold in 2017 are locally made under the Make in India program announced by Prime Minister Narendra Modi. Samsung, one of the leading mobile manufacturers, assembles the smartphones it sells in India locally.

Apple who at present only assembles the iPhone SE was planning on scaling up the production and manufacturing in India who earlier sought Tax exception from Government will be the most affected by the new Tax hike. The new tax hike will not only affect Apple, but also is likely to affect most mobile phone manufacturers who are dependent on imports.

Along with mobile phones, the Government of India has also raised the import duty on video cameras to 15 percent from percent and for televisions it has been doubled to 20 percent. India’s goods imports in the seven-month period which ended in October rose percent to $256.4 billion from a year earlier.